$17 million banking scheme leader from Waxhaw sentenced to years in prison
The leader in a $17 million bank fraud scheme was sentenced to 15 years in prison on Tuesday.
Kotto Yaphet Paul, 50, of Waxhaw, N.C., was the organizer of a scheme that defrauded at least 17 federally-insured financial institutions, according to a U.S. Attorney’s Office news release. Following his prison sentence, he will serve five years of supervised release.
His co-conspirator, Latoya Tameika Ford, 50, of Covington, Georgia, was sentenced Tuesday to 27 months in prison followed by three years of supervised release.
Paul and Ford pleaded guilty to conspiracy to commit wire fraud and bank fraud. Paul also pleaded guilty to money laundering and aiding and abetting.
According to court records, the affected banks included Charlotte-based Truist, Coastal Carolina National Bank and PNC Bank.
The scheme
According to court documents and proceedings, the scheme began in 2018.
Paul was also the primary beneficiary of the fraud conspiracy. He relied on seven other co-conspirators to prepare fraudulent loan applications, prosecutors alleged.
The loan types included business loans for the purchase of equipment, land development and residential mortgage loans.
To secure the loans, Paul and his co-conspirators made false statements on loan applications and provided fraudulent documentation such as false income and employment information, financial and bank statements and tax returns, prosecutors said.
The loan applications contained misrepresentations about the purpose of the loans and the operations of the relevant businesses.
In total, at least 42 loans were issued based on the falsified documents.
The defendants used the loan proceeds to purchase real estate, cover unrelated business expenses, make investments, make payments toward earlier loans and pay for personal expenditures, the U.S. Attorney’s Office news release said.
Court documents also said Paul engaged in money laundering by using the funds from the scheme.
Court documents show that the defendants defaulted on most of the loans, causing substantial losses to the institutions that issued the loans.
Other co-conspirators
▪ Another co-conspirator, Bruce Howard Marko, 66, of Charlotte, was previously sentenced to 12 months and a day in prison followed by two years of supervised release. He was ordered in April to pay restitution in the amount of $1.5 million.
Four other defendants were ordered to pay restitution ranging from $620,000 to more than $3.1 million:
▪ Another individual charged in the case, Love Norman, of West Palm Beach, Florida, previously pleaded guilty to conspiracy to commit wire and bank fraud and is awaiting sentencing.
▪ Amrish D. Patel was sentenced to 15 months in prison, Dwight A. Peebles Jr., was sentenced to 18 months in prison.
▪ Denise Woodard was sentenced to 36 months in prison and Derrick L. Harrison was sentenced to a year and a day in prison.
